UK Energy Bill formally establishes new Oil and Gas Authority to get MER out of N. Sea

North Sea oil rigBy DARA BUTTERFIELD

Oil & Gas UK has announced their support for the new Energy Bill, published on the 10th, welcoming the formal establishment of the Oil and Gas Authority (OGA).

In addition to formally establishing the OGA as an independent regulator, the bill will transfer to them the Secretary of State for Energy and Climate Change’s existing regulatory powers on oil and gas, as well as giving them additional powers for dispute resolution and sanctions.

Deirdre Michie, Chief Executive, Oil & Gas UK, said: “While it will take time to digest and comment on the full detail of the Energy Bill, we welcome its publication as it formally establishes the Oil and Gas Authority as an independent, government company.

“The OGA is a critical catalyst for the work being done to sustain offshore oil and gas activity and the Bill aims to provide the new regulator with the tools and capabilities it will need to do the job effectively and efficiently so we support its swift passage through Parliament.

“The provisions contained in the Bill complete the implementation of Sir Ian Wood’s recommendations for MER UK – Maximising Economic Recovery from the UK Continental Shelf, which enjoy cross party support.

“The commissioning of the Wood Review and implementation of its recommendations, along with the tax changes announced in this year’s Budgets, lay strong foundations for the regeneration of the UK North Sea.

“Big strides are being made by industry to improve the efficiency and reduce the cost of operations with average lifting costs anticipated to fall as a result over the next twelve months. The focus of the industry now is to continue that work while maintaining comprehensive engagement with the OGA and HM Treasury.”

The new Energy Bill will:

  • Formally establish the OGA as an independent regulator, which will take the form of a government company, charged with the asset stewardship and regulation of domestic oil and gas recovery.
  • Transfer the Secretary of State for Energy and Climate Change’s existing regulatory powers on oil and gas to the OGA. The Secretary of State’s regulatory functions in relation to the environment would not be transferred.
  • Give the OGA additional powers including: access to company meetings; data acquisition, retention and transfer; dispute resolution; and sanctions.
  • Introduce provisions in relation to charges for the offshore oil and gas environmental regulator’s services to the industry.
  • Make legislative changes to remove the need for the Secretary of State’s consent for large onshore wind farms (over 50 Mega Watt) under the Electricity Act 1989, acting alongside other measures to, in effect, transfer the consenting of new onshore wind farms into the planning regime in the Town and Country Planning Act 1990.
  • Seek to end public subsidies for new onshore wind in Great Britain under the Renewables Obligation from 1 April 2016.

Meanwhile, the 2015 Oil and Gas UK Awards presentation event will take place in  Aberdeen on 5 November. Nominations close on 14 August 2015.

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